Mekong Delta: Vivid Efforts to Attract FDI

Experts said, the Mekong Delta region will continue witnessing modest FDI inflow from now to the year-end due to the world market’s slow recovery. So far, Ben Tre province has pulled in 22 FDI projects valued at US$152 million. The provincial Department of Planning and Investment’s Director Nguyen Truc Son said, the province has licensed just one FDI project costing over US$1 million in the aquatic breeding sector since early this year. Due to bad impacts by the global economic slump, foreign companies restrict their new investment, instead of focusing on raising capital of their existing projects. Son also added that the lower FDI inflow is attributed to the provinces’ limited investment priorities. Meanwhile, FDI enterprises face weaker demand for their key products in the province. For instance, coconut rice, one of Ben Tre’s strengths has encountered difficulties because of exporters’ demand decline, which include the Middle East and the US, and also lack of new contracts.

 

Kien Giang province is now home to 410 projects capitalised at around VND201 trillion, comprising 13 FDI projects of VND27.532 trillion. So far this year, Kien Giang has lured not any new FDI projects, which is partially attributed to negative impacts of the global economic downturn. However, the main reason for this is the province’s tightened investment policies in tourism and industrial park infrastructure. According to the People’s Committee of Kien Giang, the province has carried out many investment attraction policies but also considered selecting investors who are strong enough and able to fight against investors with speculation intention. Earlier, a foreign company proposed to invest in a billion-of-USD project in the local island of Phu Quoc, but the investor failed to prove their financial ability, therefore, they did not receive the province’s approval for the project. Recently, local authorities have revoked investment licenses of Phan Thi Group’s project due to slow implementation pace.

 

Statistics from Mekong Delta cities and provinces indicated that, most of their FDI projects are facing slow implementation and the FDI sector’s industrial production value has also remarkably decreased. In the first half of this year, the whole region’s industrial production value reached only VND44.669 trillion, fulfilling 39.2 % of the full-year target. Can Tho city and An Giang province saw a fall of 33.3 % and 22 % respectively compared to the same period of last year. Long An province, which tops the region in FDI attraction, also posted an on-year slight increase in industrial production value of 1.7 at VND5.383 trillion. The majorities of the Mekong Delta region’s projects focus on labour-intensive sectors such as garment and textile, seafood and footwear. However, some economists said, the slowdown is only temporary as the region’s small-scaled FDI projects have been not much affected by the global economic crisis. The region is expected to receive more FDI from now to late this year.

 

According to the industrial park and economic zone managing board of Can Tho city, local industrial parks are now home to 21 FDI projects which become operational. In the first six months of this year, these projects generated a modest industrial production value of US$62 million, down 33.3 % on-year and gained export turnover of US$19.4 million, down 36 % from a year earlier. From now to the year end, industrial parks in Can Tho target additional US$50-US$60 million FDI. However, it seems to be difficult for the city to reach the goal, as in reality, the FDI disbursement in the parks is moving at a snail’s pace. The city is speeding up site clearance, developing industrial parks’ infrastructure and holing more investment promotion activities to attempt more FDI.

Economists suggested that localities in Vietnam should select a direct investment promotion method abroad to call on investors. Not only Can Tho city, but also Ben Tre province has succeeded in direct investment promotion programmes. Son said that, the Mekong Delta region is likely to see a FDI recovery by the end of this year. “In the current situation, the region should actively launch direct investment promotion campaigns, not wait for them to come to be invested in, he noted.

 

In fact, the region has seen an improvement in the FDI inflow, but just in a modest level. Phan Thanh Phi, Head of Long An province’s industrial parks and economic zone management board, said it is impossible to forecast the FDI capital which depends on the world’s economic situation. Since early this year, the scale of FDI projects in Long An province’s IPs have narrowed, mainly in the areas of outsourcing and good consumer goods. “It is necessary to select projects, because the global economic downturn affects the local economy, but it is a chance to attract FDI. However, projects harmful to the environment must be removed,” Phi highlighted. The province will tighten control over licensed projects to develop industrial park infrastructure and residential areas. It will create favourable investment conditions to ensure their projects’ pace and revoke investment certificate of delayed projects without legitimate reasons.